This paper examines how, despite their role in providing access to financial services, Non-Banking Financial Companies (NBFCs) have emerged as significant facilitators of money laundering in India. This is brought on by legal loopholes, lax enforcement of anti-money laundering regulations, and a lack of systemic openness. Using a qualitative doctrinal approach, augmented by a small amount of quantitative data, and by looking at actual instances of high-profile financial crimes like the PMC-HDIL fraud and the Chinese lending app scam, the paper dissects money laundering techniques like shell companies, round-tripping, hawala operations, and fake loans. The regulatory frameworks of banks and NBFCs are thoroughly compared, compliance with RBI and PMLA standards is assessed, and potential regulatory adjustments are delineated. The findings demonstrate that the NBFC sector is now more exposed due to inadequate monitoring, uneven enforcement of KYC/AML regulations, and a lack of agency cooperation. The study is limited, though, in that it only uses secondary sources; field interviews, direct data collecting, and access to internal compliance records are not included. The study comes to the conclusion that until India moves toward centralized risk intelligence and predictive, technology-integrated regulation, NBFCs will remain high-risk facilitators of illicit funding.